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Accident benefits priority dispute between driver's own insurer and company car's insurer

January 2010

In ACE INA Insurance v. Co-operators General Insurance Co., 2009 CarswellOnt 1668 (Ont. S.C.J.), the claimant initially applied to the driver's insurer, the Co-operators, for payment of accident benefits. However, the Co-operators took the matter to arbitration and argued that, under the "company car" provision, the claimant was a named insured under the ACE policy which made ACE solely responsible for his accident benefits claim. The arbitrator agreed with the Co- operators and ACE appealed the decision.

s.268(2) of the Insurance Act

When claiming accident benefits, the occupant has first recourse to the insurer of an automobile for which the occupant is a named insured and the next recourse is to the insurer of the automobile in which the claimant was an occupant, in accordance with s. 268(2) of the Insurance Act.

s.66(1) of SABS

Under s.66(1) of the SABS regulation, an individual who is living and ordinarily resident in Ontario shall be deemed a named insured under the company automobile policy of the employer if, at the time of the accident, the insured automobile is being made available for the individual's regular use.

Since the accident occurred in the evening when the plaintiff was in his friend's car, which was heading downtown, the court held that the company car was not being made available to him at the time of the accident. The court agreed with ACE's position that by adding the phrase "at the time of the accident" and the word "being" next to the phrase "made available", the legislature intended to extend coverage to an individual where the insured vehicle was contemporaneously available for regular use.

Conclusion

This decision illustrates the importance of determining the circumstances of an accident and the availability of the company vehicle at the time of the accident, when there is a priority dispute between the insurer of the company car and the insurer of the vehicle in which the claimant is an occupant. The occupant will only be considered a named insured under the company automobile policy if the company car was contemporaneously available for regular use at the time of the accident.


 

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